Batesville has dropped a lawsuit challenging the way Southside residents collected petitions last year in their bid to incorporate, which removes the last barrier for Southside to become the state's 501st town.
The issue was set for an Independence County Circuit Court hearing on Monday.
City attorneys questioned the proposed city limits for Southside, which is just south of Batesville, because a portion goes through the Batesville Municipal Airport. Two-thirds of the airport is inside what will be Southside, although Batesville owns and manages the facility.
One of the city's borders bisects an airplane hangar, Batesville Mayor Rick Elumbaugh said Friday.
But after conferring with attorneys from the Arkansas Municipal League the past few months, aldermen voted to drop the lawsuit during a special City Council meeting Thursday night.
"We no longer feel that the issue is a threat," Elumbaugh said. "We felt like it's time to move forward and work with Southside in future projects."
Batesville first expressed interest in annexing 1,400 residents of the Southside community last summer. The area sits atop Ramsey Mountain just across the White River from Batesville and, because it's landlocked elsewhere, was the only area left for growth for the Independence County town of 10,248 people.
City officials placed the annexation issue on the November general election ballot.
Residents of the area balked at the proposal, saying they feared their property taxes would increase if Batesville took over, and instead filed a petition to incorporate and become a new town.
However, Batesville challenged the way the petition signatures were collected. In its lawsuit, the city contended that residents who signed the petition were not shown a map and weren't aware of the city limits.
During a heated hearing in October, County Judge Robert Griffin ruled that there was no wrongdoing on petitioners' part and granted Southside's request to incorporate.
A week later, voters defeated Batesville's annexation issue by 2,211 votes to 1,395 votes, allowing Southside to continue on with its incorporation proposal.
Finally, on Thursday night, City Council members voted 6-2 to drop the lawsuit challenging the petitions.
"I'm not surprised," Griffin said. "No testimony was offered [during the October hearing Griffin presided over] that there was any fraud. The city could not prove maps weren't presented with petitions when they sought signatures."
Mark Hayes, an Arkansas Municipal League attorney who represented Batesville in the October hearing, said he thought Batesville's ownership of the airport did not pose a problem.
Elumbaugh said the airport, while owned by the city, is run by a commission and is almost "self-supportive." The city gave the commission $90,000 for airport operations last year, the mayor said.
"I think if there any issues that may come up about the airport, the two cities can work it out in time," Hayes said. "It sounds like a recipe for confusion, but I think they can work it out.
"After lengthy conversations with lawyers over the past couple of months, we came to the conclusion that it was time to move to the next phase of life, Hayes said. "Rather than spend more time and money on this, we thought we'd drop the issue and move on."
Griffin said Southside residents will vote to establish its government, and if they enact any property millage or sales taxes, they would deal with how it affects the airport then.
"I don't see any problems," he said.
Elumbaugh said he hopes to work with Southside in the future in any joint efforts to recruit industry to the area.
"Our main concern has always been to promote the economic development of this area," he said. "I'm ready to move on and work with them."
State Desk on 02/28/2015